HMRC does not shy away from carrying out investigations covertly to highlight tax fraud. HMRC off Members of their Enforcement and Compliance Taskforce have broad powers to expose tax evasion, including entering business premises disguised or simply posing as customers.
Connect
In addition, HMRC operates a new computer system, known as ‘Connect’. The system evaluates data to detect occasions where individuals’ lifestyles appear to exceed their means. Connect is responsible for many HMRC undercover operations.
It is important to understand HMRC TAX investigations and what to expect.
HMRC uses its staff and other civil fraud and criminal investigation services, as allowed under Section 9.Usually, fraud and illegal activity warrant investigation. HMRC uses every means if it believes it has the right to carry out an undercover investigation in such circ*mstances as:
- False information provided;
- A deliberate attempt to defraud and withhold VAT;
- Systematic effort to attack the system by organised criminal gangs;
- Intentional destruction of incriminating documents;
- False documents used.
Does HMRC investigate all tip offs? – and Cash Businesses
Restaurants, taxi firms, takeaways, and other everyday cash payments are routine in covert investigations. HMRC employs the services of customers or mystery shoppers to visit suspect businesses, pay in cash for the meal, and then trace the transaction for tax purposes. However, should the transaction not show up in books and records of the business, acts of proof of potential money laundering and failure to record and pay tax.
HMRC maintains a close watch on cash businesses and conducts undercover checks from tip-offs, usually from former staff.
False Coronavirus Job Rention Claims
During the recent COVID-19 pandemic. HMRC investigate fraudulent Job Retention claims.
Additionally, a similar issues appears to be happening with fraudulent bounce back loans,
HMRC Intrusive Surveillance Measures
If serious criminal activity is suspected, HMRC may apply to use the powers described in theRegulation of Investigatory Powers Act 2000 (RIPA). These include covert surveillance, covert human intelligence, intercepting posts for review, monitoring telephone calls. However, HMRC only carries out such measures in severe cases. HMRC officers need high-level approval. So it may be necessary to acquire a court order first.
